Bank of Japan Holds Ground Against Tide of Rising Central Bank Rates
July 21, 2022
The Bank of Japan as expected made no concession to globally generated inflation, this year’s depreciation of the yen, and the trend of other central banks that have been tightening monetary policies. At its latest meeting, the BOJ Board kept its short-term interest rate at -0.1%, which has been the level since March 2013, or the 10-year JGB yield target of “around zero percent,” since a Quantitative and Qualitative Expansion with Yield Curve Control framework was adopted in September 2019. As has been the case for a long time, the vote in favor of the status quo was 8-1 with Board member Kataoka again dissenting in favor of even greater stimulus. The Bank of Japan’s quarterly Outlook for Economic Activity and Prices report was released after the meeting ended. GDP growth in Fiscal 2022 was revised downward by a half percentage point to 2.4%, while forecasts for the ensuing fiscal years were bumped marginally higher to 2.0% and 1.3%. Projected core inflation was raised to 2.3% in Fiscal 2022, 1.4% in fiscal 2023 and 1.3% in the outyear of FY 2024. Not only did officials reject any notion of raising its interest rates, they retained the pledge to intensify stimulus if inflation fails to track as they assume, and it becomes apparent that the inflation goal cannot be reached.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Bank of Japan
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